Merck (MRK) Posts Positive Results From PAH Drug Study

Merck MRK announced that the phase III STELLAR study, evaluating its investigational pulmonary arterial hypertension (PAH) drug sotatercept, achieved its primary and key secondary endpoints.

The STELLAR study evaluated the safety and efficacy of sotatercept against placeboas an add-on to the current standard of care for adults with PAH (WHO Group 1). The study achieved its primary endpoint of sotatercept exhibiting significant improvement in exercise capacity, as measured by 6-minute walk distance (6MWD) following 24 weeks of treatment initiation.

The STELLAR study also achieved statistical significance in eight out of nine secondary efficacy outcome measures with statistical significance, including multi-component improvement andtime to death or the first occurrence of a worsening clinical event. However, the study failed to achieve statistical significance for the final secondary endpoint of the Cognitive/Emotional Impacts domain score of PAH-SYMPACT.

The data from the STELLAR study was also consistent with data from the phase II PULSAR study, which evaluated sotatercept in PAH patients. The PULSAR study also achieved its primary and key secondary endpoints with statistical significance.

Shares of Merck have gained 18.1% in the year against the industry’s 5.6% decline.

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Sotatercept was added to Merck’s pipeline following its acquisition of Acceleron Pharma last yearfor an approximate total equity value of $11.5 billion to build its rare diseases portfolio.

Originally, sotatercept was being developed by Acceleron in collaboration with Bristol Myers BMY. This collaboration has now been assumed by Merck. Per the terms of the agreement, Merck holds exclusive development and commercialization rights for the drug in pulmonary hypertension (PH), while Bristol Myers has exclusive rights to develop and commercialize sotatercept outside the PH field.

In consideration for granting these rights, Merck is eligible to receive potential milestone and royalty payments from Bristol Myers.

Bristol Myers is also eligible to receive royalty payments on future sales of sotatercept in the PH field.

If sotatercept were to be approved, it would face stiff competition from the PAH drugs marketed by United Therapeutics UTHR, which currently dominates the PAH market. United Therapeutics currently markets 4 PAH medicines – Remodulin (injectable version), Orenitram (oral version), Tyvaso (inhaled version) and Adcirca tablets.

Earlier this May, the FDA approved United Therapeutics’ new drug application for its dry powder inhalation (DPI) formulation for Tyvaso in PAH and pulmonary hypertension associated with interstitial lung disease (PH-ILD). Following approval, Tyvaso DPI became the only dry powder inhaler approved by the FDA for use in PAH and PH-ILD.

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Zacks Rank & Stocks to Consider

Merck currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the overall healthcare sector is Novartis NVS, which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, estimates for Novartis’ 2022 earnings per share have increased from $6.06 to $6.09. During the same period, earnings per share for 2023 have increased from $6.68 to $6.69. Shares of Novartis have lost 13.6% in the year-to-date period.

Earnings of Novartis beat estimates in three of the last four quarters and missed the mark just once, witnessing a surprise of 1.39% on average. In the last reported quarter, NVS delivered an earnings surprise of 3.31%.

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